WASHINGTON: The US-China relationship will continue to face challenges, and the management of “shocks” when they occur will be key to preventing escalation, US Treasury Secretary Janet Yellen said in prepared remarks Thursday.
“We seek not to resolve all our disagreements nor avoid all shocks. This is in no way realistic,” she said in comments to be delivered at the US-China Business Council’s 50th anniversary dinner in Washington.
But Yellen added, laying out priorities for US-China economic ties next year, that Washington aims to “make our communication resilient.”
This is so that when both sides disagree and shocks occur, “we prevent misunderstanding from leading to escalation and causing harm,” she said.
Officials from the world’s two biggest economies have sought to put a floor under relations as tensions soared in recent years – with both countries clashing on issues ranging from human rights to export controls.
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President Joe Biden’s administration has made some steps to take the heat off, with visits to China by Secretary of State Antony Blinken, as well as by Yellen and Commerce Secretary Gina Raimondo.
In November, Biden and Chinese President Xi Jinping held an in-person summit, agreeing to restore military communications.
Yellen said in the prepared speech that her next trip to China as Treasury chief will include discussing “difficult areas of concern.”
She added that the United States will hold firm its commitment to clear communication on issues like outbound investment restrictions, and keep pushing China on national security issues.
Other priority areas include “pressing for clarity on China’s economic policies and policymaking to better inform our own decision-making,” according to Yellen’s remarks.
“Understanding China’s plans, especially how China intends to respond to challenges with local government debt and the real estate market or how it might react if unexpected weaknesses in its economy should arise, is crucial,” she added.
The United States will also seek more transparency on China’s non-market practices, Yellen said, and aim to boost exchanges such as between financial regulators and in climate cooperation.